Equilibrium in a Monopsony Market

Equilibrium in a Monopsony Market - and cost data from...

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Equilibrium in a Monopsony Market In a monopsony market, the monopsonist firm—like any profit-maximizing firm—determines the  equilibrium  number of workers to hire by equating its marginal revenue product of labor with its  marginal cost of labor. Figure 1  illustrates the monopsony labor market equilibrium, using the supply 
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Unformatted text preview: and cost data from Table 1 . TABLE 1 A Monopsonist's Marginal Cost of Labor Labor (number of workers) Wage (per hour) Total cost of labor Marginal cost of labor 1 $10 $10 $10 2 15 30 20 3 20 60 30 4 25 100 40 5 30 150 50...
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